Mulberry Clinic Uses Patient-Visits as Its Measure of Activity

question 59

Essay

Mulberry Clinic uses patient-visits as its measure of activity. The clinic bases its budgets on the following information: Revenue should be $48.70 per patient-visit. Personnel expenses should be $27,600 per month plus $14.70 per patient-visit. Medical supplies should be $1,000 per month plus $10.10 per patient-visit. Occupancy expenses should be $9,500 per month plus $2.40 per patient-visit. Administrative expenses should be $3,800 per month plus $0.10 per patient-visit.
The clinic reported the following actual results for August: Required:
Prepare a report showing the clinic's revenue and spending variances for August. Label each variance as favorable (F) or unfavorable (U).

---

Definitions:

Scatterplot

A graphical representation using dots to show the relationship or correlation between two variables.

Perfect Correlation

A relationship between two variables where one variable can be perfectly predicted from the other.

Correlation Coefficient

A numerical measure that indicates the strength and direction of a linear relationship between two quantitative variables.

Least Squares Line

A straight line that minimizes the sum of the squares of the differences between the observed and predicted values.